Money Answers

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What gives commodity money its value?

a government’s guarantee of its value

the type of material with which it is made

its rate of exchange in other countries

the ability to trade it for a valuable good

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How is using money related to bartering?

It is a substitute for bartering.

It is the opposite of bartering.

It is a newer form of bartering.

It is an old form of bartering.

What is a potential disadvantage of using debit cards when compared to barter and traditional currency?

collaborative

wide acceptance

ease of overspending

more privacy and flexibility

What would happen if currency in all countries had fewer denominations, i.e. fewer varieties of coins or numbers of bills?

People would be more likely to confuse the value of currencies.

Exchanging money between countries would be much easier.

People could not charge as many different prices for goods.

All goods would be more expensive than they currently are.

Exchange rates can indicate economic health by

showing exactly how much of each nation’s currency is liquid.

revealing how much of each nation’s income goes to savings.

showing the relative strength of different nations’ currencies.

examining spending patterns across nations and continents.

What is one problem that might commonly occur when one is bartering?

Someone wants to trade a valuable item for a less valuable one.

Two people have different ideas about the value of an item.

Someone wants to barter a good in exchange for a service.

Two people want to trade items of equal or nearly equal value.

What might cause a change in the value of fiat money?

a change in the value of commodities

a change in government regulations

a change in materials used to make money

a change in individuals’ spending habits

A currency is a system of money created and used by

an individual or a group of people.

all people who live in the same era.

a nation or region of the world.

a town, city, or state within a region.

Which of the following is the least liquid?

savings account

checking account

credit account

investment account

Which is an advantage of using modern currency instead of a barter system?

risk of a loss in value or counterfeiting

difficulty in determining the value of goods

ability to store and use a form that is accepted everywhere

a limited amount of goods and services available

To barter means to

sell.

create.

trade.

earn.

What is true of representative money? Check all that apply.It can be exchanged for a valuable good.It was once the most common form of money.It was used in systems involving a "gold standard."It can be traded for a commodity such as silver.It is made with precious metals or stones.

It can be exchanged for a valuable good.

It was once the most common form of money.

It was used in systems involving a "gold standard."

It can be traded for a commodity such as silver.

It is made with precious metals or stones.

Exchange rates can indicate economic health by

showing exactly how much of each nation’s currency is liquid.

revealing how much of each nation’s income goes to savings.

showing the relative strength of different nations’ currencies.

examining spending patterns across nations and continents.

Which could be a negative factor of a barter system?

Both individuals easily agree on the value of their goods.

One person may not want or need what the other person is offering.

Goods can be exchanged without the need for any physical currency.

The process requires money so the two people involved can easily come to an agreement.